A FERC administrative law judge (ALJ) touched a sensitive topic at a recent oral argument when he berated a FERC staff attorney about Commission staff viewing themselves as public interest attorneys and not representing FERC in proceedings before ALJs.

Twice in the transcript of the oral argument held in an oil pipeline rate case, ALJ John Dring refers to a “virus” among FERC staff attorneys that they are taking positions in cases not to represent the Commission but representing the public interest. In discussing the position taken by FERC staff in the case involving BridgeTex Pipeline Co. LLC, Dring told staff trial attorney Christopher Psihoules “I read this as part of a viral infection going through your organization” in the Office of Administrative Litigation (OAL).

Psihoules said he would pass the word within OAL of the judge’s remarks, according to the transcript.

Dring, who has been an ALJ at FERC since November 2005, said other judges and attorneys who participate in cases before the Commission complain about this very issue, and “at some point it’s going to have to be addressed.”

The words of Dring produced some interesting reactions among attorneys in the Energy Bar Association community, though several declined to comment on the record out of concern that their views would affect their standing as practitioners before the Commission.

“I agree with the judge,” that there has been a gradual change in mentality among FERC staff trial attorneys, said a former commissioner who asked not to be named. “When I was a commissioner I always expected trial staff to represent the position of the Commission.” Yet over time, “their perception of their mission has changed,” the former commissioner said.

The change is not anything nefarious or representative of different leaders at the Commission in the past several years, but a “groupthink mentality that has morphed over time,” the former commissioner said.

What takes place in the hearing rooms before ALJs is not very transparent to commissioners on the 11th floor of FERC’s headquarters building, and the judges have a closer interaction with FERC staff attorneys, the former commissioner noted.

In legal proceedings before FERC ALJs, who are in a different building than much of FERC staff and commissioners, “if you really believe that you are engaging in public interest representation I cannot in good faith rely on your opinions when you are talking about other things like upholding the Commission’s positions on Commission policy, precedent and Commission interpretation of law. Does that make sense to you?” Dring asked Psihoules.

“It does, and I will take full responsibility as the drafter” of the document being discussed, Psihoules said.

“You may take full responsibility, but there is a virus over there in your building” because plenty of FERC staff have a mistaken notion that they are public interest attorneys, when that is not their mission, Dring said.

In the description of the OAL on the FERC website, it says “the lawyers & technical staff in this office represent the public interest and seek to litigate or settle cases in a timely, efficient and equitable manner while ensuring the outcomes are consistent with Commission policy.”

Dring clearly takes issue with that view based on comments in the transcript. He told Psihoules he was not picking on him in particular, but as a means to address something he has seen over the years, often in settlement proceedings. There are times “when the Commission staff goes off the reservation entirely and they argue something that is not Commission policy because they just think it ought to be changed. And that’s public interest advocates. And that’s just not what you are supposed to be doing,” he said.

“I have seen this in cases at the Commission,” said an attorney in private practice who asked not to be named.

The FERC press office said the Commission has no comment on the matter.

Dring related that he was at a recent retirement ceremony for an attorney in OAL who said it has been wonderful to be a public interest attorney for the past 35 years. “And I was standing right next to one of the former commissioners and a practitioner who went to law school with me, and we just kind of looked at each other; what is going on here? Somebody has got to address this, okay?”

“You are correct, Your Honor, we need to uphold Commission policy, and I appreciate your pointing this out.,” Psihoules said, according to the transcript of the April 17 oral argument.

“I completely agree with the ALJ,” said Tyson Slocum, energy program director with the public advocacy group Public Citizen. Slocum said he has not encountered this issue before in practice, but he would be concerned if FERC attorneys view themselves as representing the public interest.

“FERC staff do a remarkably good job,” Slocum said, emphasizing that he is not diminishing their accomplishments and hard work. But their job is to represent FERC and Commission policy. “If you feel you’re representing the public interest, you might not consider as much filings or comments by public interest advocates who are intervening in various dockets,” he said.

At the state level, many states have an Office of Public Counsel or Office of Consumers’ Counsel to represent consumers, separate from state regulatory staff, who represent the views of a public utility commission. Consumers often want lower power prices or utility rates, while the role of regulatory staff and commissioners is to balance the interests of investors, consumers, and other parties.

Slocum noted that Public Citizen and a host of other groups filed a petition with FERC in 2016 to have the Commission craft a rulemaking to establish an office of public participation, with the support of Congress. The petition and Slocum, during an interview, noted that as energy markets have become more complex, the need for an office of public participation has become greater.

FERC often relies on notices and comment procedures for the development of tariffs at regional transmission organizations (RTOs) that are followed closely by industry attorneys and those with vast resources to represent energy market participants. Public interest organizations representing the interests of household consumers do not have such resources, the groups noted in their petition (RM16-9), which has not been acted on by the Commission. RTO tariff proceedings rarely result in formal, evidentiary hearings where OAL attorneys could play a role in representing the public interest, the groups said.

Among sources reached for this story, there was a difference of opinion on the need for FERC to establish an office of public participation.

Attorney Scott Hempling offered the perspective that there need not be such a bright line for FERC staff to represent either the Commission or the public interest. FERC staff “can present Commission policy while also offering creative ideas. Otherwise, the only ‘creativity’ in the room comes from private parties whose interests can deviate from the public interest,” said Hempling, who specializes in utility law and is an adjunct professor at the Georgetown University Law Center.

“In complicated times, the Commission needs all the help it can get. Why stifle professionals?” Hempling said.

The director of OAL is Nils Nichols, who has served in several roles at the Commission. Before leading OAL, he was director of the Division of Pipeline Regulation, and he previously served as director of FERC’s Dispute Resolution Service. Nichols also worked in the Office of General Counsel, with a specialty in environmental law and natural gas pipeline certificate issues, and as legal advisor to former chairmen Joseph Kelliher and James Hoecker.

Dring came to FERC after serving as an ALJ at the Social Security Administration. In practice before becoming a judge, he represented an interstate natural gas pipeline and served as a staff member in the U.S. House of Representatives and the Senate, according to his biography.

“Judge Dring is a thoughtful, substantive, experienced and hardworking ALJ,” said William Scherman, a former general counsel at FERC and an attorney at Gibson, Dunn & Crutcher LLP. Scherman said he is not familiar with the oil pipeline case at issue in the oral argument and declined to comment on Dring’s remarks.

In the oil pipeline case, Occidental Energy Marketing Inc. (OEMI) filed a complaint challenging the rates and treatment of expansion shippers compared with original shippers on the BridgeTex system. BridgeTex sought partial summary disposition of the complaint and protest, which was before Dring during oral argument.[1]

In an April 23 order (IS18-102; OR18-6; IS18-147), Dring denied the pipeline’s motion for partial summary disposition. He agreed with FERC staff’s position that the proceeding is a matter of first impression, as FERC has not previously addressed new rates favoring committed expansion shippers to the detriment of an original shipper.

“This proceeding presents issues of first impression that warrant a full and complete evidentiary record,” Dring said, denying the motion of BridgeTex as premature. He ordered the participants to continue to engage in good faith discovery so that a full record can be established to adjudicate the issues.